VoiceWalker

Dec 15, 2010 11:36 AM,

By Joan Engebretson

FTTX, LTE and other mobile upgrades will drive a 1.6% worldwide increase for 2011, researchers predict

In terms of telecom spending, the recession is over, according to a new report from Infonetics Research.

According to the firms new Service Provider Capex, Opex, ARPU and Subscribers report, worldwide telecom capital expenditures are on track to decline 3% for 2010 to about $289 billion, following a 5.3% drop in 2009. But Infonetics predicts a 1.6% increase in telecom carrier capex in 2011, with continued growth to $321 billion in 2014 before growth slows again.

Driving capex growth between 2011 and 2014 will be telecom carriers investment in fiber-based broadband (FTTX) networks, 2G mobile network capacity expansion, network migration from 2G to 3G and migration to LTE. A large part of the capex spending decline in 2010 is the result of carriers in China, which invested heavily in network upgrades in 2009, have now completed their 3G rollouts, Infonetics said.

Despite the overall decline in capex spending for 2010, there were some bright spots. Video infrastructure, IP routers, and carrier Ethernet switches saw double-digit worldwide revenue increases in the first half of 2010.

Perhaps Infonetics results are evidence that the broadband stimulus program will have a positive impact on the telecom market. The program awarded grants worth $7.2 billion toward broadband initiatives, the majority of which went to network operators for infrastructure initiatives. But the total investment generated should be considerably more, as some additional funding was awarded in the form of loans and many network operators brought matching funds to the projects.